We study an investment experiment conducted with a representative sample of German households. Respondents invest in a safe asset and a risky asset whose return is tied to the German stock market. Experimental investments correlate with beliefs about stock market returns and exhibit desirable...

This paper presents a time-continuous portfolio selection model with loss averse investors, who possess multiple investment goals at different time horizons. The model assumes partial narrow framing. Investors follow a two-step approach. First, they optimally allocate wealth among investment...

The global trend towards tighten regulation of financial institutions and the adoption of International Financial Reporting Standards (IFRS) may hasten the unwinding of cross-shareholdings in Japan, and there are signs that this is already happening. Finding buyers for such shares is therefore a...

This study found that people who suffer from seasonal affective disorder (SAD) displayed financial risk aversion that varied across the seasons as a function of seasonally changing affect. The SAD-sufferers had significantly stronger preferences for safe choices during the winter than...

This paper employs subjective stock market expectation responses from Health and Retirement Survey as a proxy for stock market optimism of American households. I first ask if individuals are inert in terms of forming their optimistic stock market views. Second I analyze the impact of optimism on...

Using data on identical and fraternal twins' complete financial portfolios, we decompose the cross-sectional variation in investor behavior. We find that a genetic factor explains about one third of the variance in stock market participation and asset allocation. Family environment has an effect...

We study whether mortgage debt obtained from licensed financial institutions and informal home loans obtained from private lending have differing impacts on stock ownership. Using the China Household Finance Survey data, we show that the two forms of borrowing have opposite effects on stock...

This paper explores portfolio allocation when individuals target the mean and variance of consumption growth. These consumption targets lead to an optimal mix of equity which depends on the equity risk premium, the rate of return on riskless bonds, the desired rate of escalation of consumption...

In sharp contrast to the recommendations of Modern Portfolio Theory (MPT), a vast majority of investors are not well diversified. This neglect of diversification is seen across all wealth segments, including the affluent. This paper attempts to provide a solution to this quot;diversification...

This research finds distinct life cycle patterns of equity participation by gender. The significant factors associated with equity participation also vary notably by gender and age. Women exhibit greater variability in both participation levels and significant factors. Family circumstances are...